Merchant Services 101 – The Basics

Presented By: Stephanie Wagner, Director of Business

Development Jon Moore, Director of Product Marketing

Presented By:

Stephanie Wagner, Director of Business Development     

Topics

• Merchant Services Providers and Processors• Understanding your discount rate• What is Interchange• Practical PCI

 

What is a merchant service provider?

Can be an Independent Sales Organization (ISO) that works with a Merchant Bank that quotes a Discount Rate to the Merchant

Handles the set-up with front-end and correctly routed to the merchant’s bank

Manages the paper work so you don’t have to

The Result

What does a processor do?

• Handles credit card transactions for Merchant Banks.• There are two types, front-end and back-end. • Some Third Party Processors are both Front-End and Back-End

Processors. • Front-End Processors have connections to various Card

Associations and supply authorization and settlement services to the Merchant Banks’ Merchants.

• Back-End Processors accept settlements from Front-End Processors via the Federal Reserve Bank (FED), they move the money from the Issuing Bank to the Merchant Bank

Criteria for joining Visa and Mastercard

Membership benefits

• Customers receive credit from the bank and receive cards

• Interchange fee is shared.• Acquirer accepts merchants into its program• Bank authorizes and settles transactions.• Acquirer shares interchange fees.• Discounts for merchant.

What is Discount Rate?

The four components of a Discount Rate are:

• Interchange • Assessments Fees which member banks pay to Visa and

MasterCard on a quarterly basis to support marketing and operating activities.

• Costs Processing Expenses including facilities, salaries, commissions, telephones, equipment, etc

• Margin Represents rates charged minus expenses. This is the bottom line profit.

Now it’s time for…

Practical PCI – 10 Points Toward A More Secure Business1. PCI Applies To You! Being security minded will help protect your business and

your patients.2. If You Don’t Need It, Don’t Store It. 3. Secure Information. If you need to retain information, start by locking cabinets

and rooms where data is stored. For electronic data, make sure it is encrypted and strongly password protected.

4. Destroy Unnecessary Data. Completely destroy records that contain cardholder data.

5. Use Strong Passwords.6. Regularly Update Computer Security.7. Use Compliant Service Providers.8. Inventory your Equipment.9. Have a Security Policy.10. Monitor Employees.

Next Steps………

• Statement Analysis – Let us show you a cost savings.• Complete Merchant Application.• Approved within 48 hours and any equipment

requested will be deployed.• Start Processing.

Contact Information

Stephanie WagnerDirector, Business Development

Stephanie.Wagner@FrontStreamPayments.com954-242-4582